Thursday, April 09, 2009

An Exercise in Game Theory

A great video (via Cheaptalk) to use when teaching the prisoners' dilemma, dominated strategies, Nash equilibrium, etc.

Update: Several readers have emailed me to point out, correctly, that the game in this video differs from a prisoners' dilemma because one strategy is weakly, rather than strictly, dominant. Problem: List all the Nash equilibria. How does the analysis change if I, as a player, am slightly altruistic toward the other player (or slightly vengeful)? What if I think the other player might be slightly altruistic toward me? The situation is wonderful for class discussion.